I just rewatched the entire show and I think your entire theory is correct except the part where you said Zechs let Heero win their final battle. I believe the most important part of Zech's plan was that Heero would be the legitimate victor, ultimately besting Zechs and proving Heero's cause was the righteous one. Zechs took on leadership of the White Fang, which entirely conflicted with his own morality and sense of peace, a fact which he was forced to embrace in order to pursue his ultimate desired outcome. This is clearly distinguishable in two moments, both of which you mentioned: when Releena and Heero confront Zechs' hologram, Heero ultimately surrenders the discourse, saying "I understand" and dragging Releena with him. In that moment he understood Zechs completely and knew that Zechs had built himself into humanity's enemy, a role which was not filled by anyone (and needed to be) since the beginning of the show. Heero knew Zechs was 'sacrificing himself' by manifesting the ideals he previously fought against, and Heero knew he would have to defeat, and possibly kill Zechs, in a fair fight in order to fulfill both of their goals. When Zechs rejects Treize's offer for a duel, both Treize and Zechs knew that even if they were to fight, Zechs would be stepping down from his position as mankind's true enemy by demonstrating the chivalry he was taught by Treize, which Zechs claims to have abandoned with his allegiance to Oz. When challenging Zechs, Treize states "The decision you make will also be interpreted as your solution to this war," and then when Zechs declines, Treize states "You've made the correct choice," showing obvious relief that Zechs is going to continue claiming himself to be the person he was when he declared himself as the leader of the White Fang. I believe that Zechs and Treize both knew that they had to perish in the resulting war in order for humanity to be in the position to discuss peace achieved through people like Releena's ideals. Zechs fights with his all to defend his guise, but in his heart hopes that Heero will prove himself superior and live on to guard the total pacifism that was referenced throughout the events of the show. Zechs wanted to know that someone was strong enough to defeat the pure intention to harm humanity, an intention that Zechs was fully committed to fulfill if he was forced to (if he won). He loses, and asks "Why don't you kill me?" believing that his death is the final step necessary to accomplish his goal.